Is It Worthwhile For Investors To Follow These Insider Trades On Redwood Trust Inc. (RWT)?


Redwood Trust Inc. (NYSE:RWT) finished Wednesday with a subtraction of -$0.11 to close at $7.06, a downside of -1.53 percent. An average of 1,799,000 shares of common stock have been traded in the last five days. There was a fall of -$0.29 in the past week, and it reached a new high 15 times over the past 12 months. The last 20 days have seen an average of 1,592,705 shares traded, while the 50-day average volume stands at 1,338,648.

RWT stock has decreased by -11.42% in the last month. The company shares reached their 1-month lowest point of $6.92 on 09/16/22. With the stock rallying to its 52-week high on 01/04/22, shares of the company touched a low of $6.57 and a high of $14.17 in 52 weeks. It has reached a new high 2 times so far this year and lost -46.47% or -$6.13 in price. In spite of this, the price is down -50.18% from the 52-week high.

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Insider Transactions

276 days have passed since Redwood Trust Inc. (RWT) last reported insider trading activity. Stone Andrew P, who is Chief Legal Officer, most recently acquired $9,936 shares at $12.20 per share on Dec 20.

Valuation Metrics

Redwood Trust Inc. (RWT) has a trailing price-to-earnings (P/E) ratio of 17.74. The stock’s beta is 1.13. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.23, the price-to-book (PB) ratio at 0.67.

The company has a payout ratio of 170.30%. The company’s most recent quarterly dividend payment was $0.23 a share, without any change from last year. Its latest increase dividend $0.02 reported on Tuesday December 7 2021.

Financial Health

Further, the company has a long term debt to equity ratio of 8.39 and a total debt to equity ratio of 9.87 for the quarter ending June 29. Its gross profit as reported stood at -$4.69 million compared to revenue of $574.93 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Redwood Trust Inc.’s return on assets was 0.40%.

Earnings Surprise

For the three-month period that ended June 29, Redwood Trust Inc. had $8.58 billion in total debt. The analyst consensus anticipated Redwood Trust Inc.’s latest quarter earnings to come in at $0.18 per share, but it turned out to be -$0.11, a -161.10% surprise. For the quarter, EBITDA amounted to $15.18 million. At the end of the quarter ending June 29, Redwood Trust Inc.’s stock balance sheet showed total debt was $12.42 billion. Shareholders own equity worth $116.77 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Redwood Trust Inc. (RWT) price momentum. RSI 9-day as of the close on 21 September was 36.83%, suggesting the stock is Neutral, with historical volatility in this time frame at 43.09%.

As of today, RWT’s price is $7.14 -3.95% or -$0.29 from its 5-day moving average. RWT is currently trading -13.27% lower than its 20-day SMA and -21.99% lower than its 100-day SMA. However, the stock’s current price level is -9.83% below the SMA50 and -45.23% below the SMA200.

The stochastic %K and %D were 23.47% and 21.00%, respectively, and the average true range (ATR) was 0.25. With the 14-day stochastic at 17.07% and the average true range at 0.25, the RSI (14) stands at 36.97%. The stock has reached -0.03 on the 9-day MACD Oscillator while the 14-day reading was at -0.05.

Analyst Ratings

BTIG Research downgraded Redwood Trust Inc. (NYSE: RWT) to a a Neutral rating in its most recent analyst report. Previously, the stock was rated as a Buy.


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